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Dream Big!

Florida’s consumers were a bit more optimistic in June

 

GAINESVILLE, Fla. – July 5, 2017 – After a two-month decline, consumer sentiment in the state rose 2.1 points in June as four out of five components moved higher, according to Economic Analysis Program at UF's Bureau of Economic and Business Research.

Respondents' perceptions of their personal financial situation now compared with a year ago showed the greatest increase. It rose 6.4 points from 85.5 to 91.9.

"Importantly, all Floridians share these perceptions, independent of their age, gender or income," says Hector H. Sandoval, director of the economic analysis program.

Is now is a good time to buy a big-ticket household item such as an appliance? Opinions about this increased 1.7 points to 102, although readings vary across demographic groups. "In particular, positive perceptions are seen among women, those under age 60 and those with an annual income of $50,000 and over, while they are negative among men, seniors and those with income under $50,000," Sandoval says.

Expectations of personal finances a year from now rose 3.5 points to 104.8.

"Overall, Floridians appear to be more optimistic. Most of the increase is due to the positive perceptions of consumers' current and future personal finance situation," Sandoval says.

Views on the future of the U.S. economy were mixed, however: Expectations of U.S. economic conditions over the upcoming year dropped 1.8 points to 91.8; however, anticipation of U.S. economic conditions over the next five years ticked up eight-tenths of a point from 90.8 to 91.6.

The labor market in Florida has continued to strengthen and add jobs each month. Since the beginning of 2017, the unemployment rate has declined steadily, and the Florida unemployment rate in May was 4.3 percent, down two-tenths of a percentage point from April. As of May, the number of jobs added statewide over the last year came to 228,000, a 2.7 percent increase that outpaces the nation's job growth rate of 1.6 percent.

Floridians' positive outlook may also be fueled by cheaper prices at the gas pump – the lowest in over a decade over the Fourth of July travel season. Having a few extra dollars left over after each fill-up may contribute to feelings of financial well-being.

Nationwide, economic activity has increased and inflation has declined on a 12-month basis. As a result, last month the Federal Reserve decided to raise the federal funds target range to between 1 percent and 1.25 percent.

"This change will eventually be transmitted to other interest rates, including car loans, credit cards and mortgages," Sandoval said. "The evolution of consumer perceptions as to whether it is a good time to buy a big household item in the following months will be an important indicator in assessing how the increased interest rates affect consumption."

Conducted June 1-28, the UF study reflects the responses of 479 individuals who were reached on cellphones, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

© 2017 Florida Realtors

 

 

Related Topics: Economic indicators